Which Statement Is Not True Regarding Underwriting Group Health Insurance

Introduction

When it comes to providing health insurance for employees many employers opt for group health insurance. This is a type of insurance plan that covers an entire group of people typically employees of a company. Underwriting group health insurance is the process of evaluating the risk of insuring this group of people. While it is an important process for insurance companies there are some common misconceptions about underwriting group health insurance.

Statement 1: Underwriting Group Health Insurance is Used to Determine Eligibility

This statement is true. Underwriting group health insurance is used to determine the eligibility of the employer their employees for coverage. During the underwriting process the insurance company reviews the group’s medical history demographics any other relevant information to determine the risk of insuring the group.

Statement 2: Underwriting Group Health Insurance Determines the Premiums Paid

This statement is also true. Underwriting group health insurance is used to determine the premiums that the employer employees will pay for coverage. The insurance company evaluates the risk of insuring the group calculates the premiums based on this risk. Groups that are considered higher risk will typically pay higher premiums.

Statement 3: Underwriting Group Health Insurance is Only Done Once

This statement is not true. Underwriting group health insurance is an ongoing process. Insurance companies will continue to evaluate the risk of insuring the group throughout the length of the policy. If the risk of the group increases the premiums may also increase.

Statement 4: Underwriting Group Health Insurance is Not Necessary for Small Groups

This statement is also not true. Underwriting group health insurance is necessary for all groups regardless of size. While smaller groups may have less medical history claims data to evaluate the insurance company will still need to review the group’s demographics other relevant information to determine the risk of insuring the group.

Conclusion

Underwriting group health insurance is an important process that determines the eligibility premiums of a group health insurance plan. It is an ongoing process that evaluates the risk of insuring the group determines the premiums based on this risk. It is necessary for all groups regardless of their size. Understanding the truths misconceptions of underwriting has significant importance for both employers employees in the long run.